Good day, ladies and gentlemen, and welcome to the Q2 2015 Meritor, Incorporated Earnings Conference Call. My name is Alison and I'll be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder, this call is being recorded for replay purposes. I'd now like to turn the call over to Mr. Carl Anderson, Vice President and Treasurer. Please proceed, sir. Carl D. Anderson - Treasurer, VP & Head-Investor Relations: Thank you, Alison. Good morning, everyone, and welcome to Meritor's second quarter 2015 earnings call. On the call today, we have Ike Evans, Jay Craig and Kevin Nowlan. The slides accompanying today's call are available at meritor.com. We'll refer to the slides in our discussion this morning. The content of this conference call, which we are recording, is the property of Meritor, Inc. It's protected by U.S. and international copyright law and may not be rebroadcast without the expressed written consent of Meritor. We consider your continued participation to be your consent to our recording. Our discussion may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Let me now refer you to slide two for a more complete disclosure of the risks that could affect our results. To the extent we'll refer to any non-GAAP measures in our call, you'll find the reconciliation to GAAP in the slides on our website. Now I'll turn the call over to Ike. Ike J. Evans - Chairman & Chief Executive Officer: Thank you, Carl, and good morning. I assume most of you have seen our two press releases this morning, so you know that we've continued to expand EBITDA margin in the quarter and we've also made an important management…

Thank you. And your first question comes from the line of Itay Michaeli of Citi. Please go ahead.

Hi, guys. Thank you so much. This is actually Justin Barell on behalf of Itay. Ike, Jay, congrats. The first question that I have I guess really is for Jay. With regards to the first 100 days for your plan, is there anything that we should expect any changes on or can you give us maybe a walkthrough of what you guys are expecting for the first 100-day plan for you? Jeffrey A. Craig - President & Chief Operating Officer: Thanks a lot for the question, Justin. The short answer is no. I mean, I think the execution and performance of the company has been nothing short of outstanding and we want to continue to execute the M2016 plan. As you can see from our revised guidance today that execution has been very strong, but we still have roughly 100 basis points of margin improvement that we expect to execute before the end of the plan. And it's certainly my job and with Ike's assistance to make sure that we just continue to stay focused on that.

Perfect. Thanks so much. And then, can you give us a sense of maybe an update on Defense quoting that you guys are involved with, just to kind of gauge the vertical and see how everything's progressing? Jeffrey A. Craig - President & Chief Operating Officer: Well, like I mentioned in my comments, the primary program we're focused on is JLTV. We expect that award towards the latter part of the summer, and so we are waiting for that award. But in the comments I mentioned in the Analyst Day, the one thing I'd like to make clear is our belief in hitting our objectives of M2016 is not dependent upon the award to us of that program or any other single program.

Perfect. And then, I believe on the call, it was mentioned that the slightly lower steel commodity prices, you guys are having a modest tailwind. Can you give us a sense of how to think about that for the – through the end of fiscal 2015? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Yeah. This is Kevin Nowlan. Thanks, Justin. Yeah, the steel tailwind in the quarter for us sequentially was about $2 million. So, when you look at that $5 million sequential improvement in material, labor and burden, $2 million of it came from steel. With where indices are in steel right now, we'd expect a little bit of additional tailwind into Q3, but then we would expect to start giving that back through our passthrough mechanisms to customers in Q4 and into the beginning of 2016. So, it becomes a headwind at the back half of the year and into 2016, but it's a little bit of a tailwind this quarter.

Perfect. And then, so in terms of the normalized cadence throughout the year, should we expect something similar to what 2014 was for the back two quarters? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Cadence in what regard? I'm sorry, Justin.

Just overall financial cadence. Essentially, the quarter-over- quarter improvements and everything like that. Kevin Nowlan - Chief Financial Officer & Senior Vice President: Yeah. I think it's right. I mean, I think if you cut through what our guidance is suggesting, you would expect that the back half of the year is going to be much closer to 9% and in part because generating 10.1% is based on a lot of proactive actions we took to hedge some of the exposures we have and to execute on our operating performance. But those hedges aren't going to repeat in the back half. So, when you eliminate those non-recurring items or those one-timers for the quarter, our run rate's probably right now closer to 9% than it is to 10%.

Right, okay. And then, just one final question that I want to ask on the South American outlook. Just trying to figure out exactly how much of the delta between your prior outlook versus the current outlook is driven by pessimism versus the financing terms? Is there a right way to think about that, like what's driving what and just exactly -- if you were to bucket the majority of the delta, would that fall more under just the general pessimism of the market or is that really just predicated on the financing programs? Jeffrey A. Craig - President & Chief Operating Officer: All right. I think the two are very interlinked. I mean, obviously, Brazil's economic reforms they're executing are pretty far-reaching. As I mentioned in my comments on the call, the impact to us directly through the commercial vehicle program is the FINAME program, but I think our revised outlook is really driven by just the overall macroeconomic conditions.

Perfect. Thank you, guys, so much and again, congrats, guys. Thank you. Jeffrey A. Craig - President & Chief Operating Officer: Thank you.

Thank you. And your next question comes from the line of Brian Johnson of Barclays. Please go ahead.

Hey. Good morning and congratulations, Jay, and hope, Ivor, you'll – Ike, you'll stay around for a while. Just a technical question, then a broader question. My technical question is the FX hedge impact, and this goes to your background, Jay, under I guess, what is it, FAS 133 that you have hedge gains realized before the offsetting underlying transactions. Can you give us a sense of just how that affected that? Are these covering up for – or not covering up -- are these sort of transactional exposures that are going to be either a headwind in later quarters or were actually in the quarter but you're calling those out separately? Jeffrey A. Craig - President & Chief Operating Officer: I appreciate your confidence in my memory skills, but obviously my CPA days are many years behind. But I think the company has done an excellent job of both hedging transaction risk, but on a limited basis, hedging some translation risk as well. But I'm going to turn your specific question over to Kevin. Kevin Nowlan - Chief Financial Officer & Senior Vice President: Hey, Brian, it's a fair question. I mean as you look at the $6 million of gains that we booked about $4 million of that $6 million relates to 2015 activity, the bulk of that being in the current quarter, and then some of that extending beyond the quarter, which means there is a couple million dollars of the hedge gains that we generated in the quarter that relate to future periods, which is really some of the rupee, euro purchasing activity that we've been hedging. So as we've been executing on our best-cost country sourcing initiative, we've been hedging out the curve two years and three years of purchasing activity to make sure that we can reap the benefits for the longer term on those programs. And so we continue to have hedges on the books to hedge against that activity going forward. So while we're not going to get that $2 million benefit anymore, we're going to continue to have a hedge position that protects against some of those currency moves.

Okay. I guess the broader question is you kept your Class 8 outlook unchanged. If you look at ACT, it's up to 335,000 now. Are you being – two questions, kind of are you being conservative, or do you see weakness in the back half of the year? I guess, two, if there is a run rate of 330,000, maybe it continues into next year, it goes up. Where are you vis-à-vis capacity? In particular, are you talking about a customer a couple quarters ago who was apparently building some in-house capacity to handle peaky kind of demand, kind of where does that stand if we have a market running in the 330,000s versus the 310,000s? Jeffrey A. Craig - President & Chief Operating Officer: Well, I think just to answer the question in sections, we feel very good about our capacity, I mean we've run quarters of production roughly at 80,000 units for a quarter. And if you look at our forecast, it's really stating that the production levels will remain roughly at where they are today. I mean this last quarter was close to 80,000 units and we're seeing that the – our forecast for the Q3 and Q4 is that they stay within 75,000 units to 80,000 units. So I think we're confident in where our forecast is. And so far we have not had any capacity issues in meeting our customers' demand, and in fact, have been able to fill some shortfalls elsewhere in the supply chain.

And similarly in Europe, you remain conservative there, some of the customers, again, Daimler, are seeing some upside there. Is this kind of, more kind of you think it's more your fiscal 2016 or you just want to be conservative for now? Jeffrey A. Craig - President & Chief Operating Officer: That's exactly it, Brian, is it's really, I think our outlook is very similar to what you've heard recently from some of the European OEs. There is really two impacts of fiscal year to calendar year comparison. We have obviously the negative impact of the pre-buy that occurred late in 2012 – 2013, and then missing the fourth quarter here of 2015. So if you neutralize for those two impacts, we have a very similar outlook to what you've heard from the European OEs recently.

And back to North America, if North America fiscal 2016 runs sort of 335,000 or higher, are you comfortable a) with the capacity and b) that the customers aren't going to be taking stuff you'd like in-house? Jeffrey A. Craig - President & Chief Operating Officer: Well, we are not really talking about any outlook yet for 2016, as you know, because of our – where our fiscal year falls, we end up being one of the first people to talk about that. But we're not ready yet at this point. In terms of our capacity, I think we feel very comfortable and very closely aligned with all our customers, including our growing relationship with PACCAR, that we can meet their needs based on what they're forecasting for production for the foreseeable future.

Okay. Thanks.

Thank you. And our next question comes from the line of Neil Frohnapple of Longbow Research. Please go ahead.

Hi. Good morning and congrats, Ike and Jay, on today's announcement as well. The 10% EBITDA margin in FY2016, you believe you can now achieve without any significant change in end markets. So just to clarify, would that be essentially based on FY2015 sales guidance range and then layering in incremental PACCAR business, or do you still need modest end market growth? I think before you kind of had called out like a $4.2 billion type number. Could you just provide some more granularity on that? Jeffrey A. Craig - President & Chief Operating Officer: Well, I think the way we look at it is if the global mix remains roughly the same and if we include the wins that we have achieved and reported out previously, we believe we can hit the guidance. So, yes, it includes the PACCAR win. And so, that gives us the confidence that we can achieve that margin target.

All right. Great. And then, regarding the expected market share recapture at DT&A for axles next year, have you seen any order activity yet for next year that would support that or is it still too early to tell at this point? Kevin Nowlan - Chief Financial Officer & Senior Vice President: Actually, we feel confident in the statement that we made at the Analyst Day back in February that this was temporary, it's been rectified, and we're comfortable that it's meeting both ours and Daimler's expectations of where our penetrations would be. And more importantly, Daimler has been extremely pleased with our deliveries and that we've been part of their, helping them drive their sales success.

All right. And then, maybe one last one for Kevin. The $6 million in hedge gains, do you have the breakdown by segment? Kevin Nowlan - Chief Financial Officer & Senior Vice President: The bulk of it is Commercial Truck & Industrial, but there is a little bit more than $1 million in the Aftermarket & Trailer segment as well.

Okay. Thanks very much, guys.

Thank you. And your next question comes from the line of Kristine Kubacki of Avondale Partners. Please go ahead.

Good morning. I was just – we've been watching -- most of the global OEMs, they've kind of reversed their outlook and upgraded their outlook on India. I was just curious on why you didn't increase your forecast there. Kevin Nowlan - Chief Financial Officer & Senior Vice President: We're certainly seeing growth in India as well. I think you're seeing people talk about a 10% market increase, and we're roughly seeing that as well, but the impact on our overall forecast is not significant. So, and a lot of that increase will start to come towards the end of the calendar year, given our fiscal year-end of September 30. But definitely the Indian market is strengthening. I think people can clearly say it's found bottom and it's recovering. And it's recovering well for our customer Ashok Leyland as well.

That's helpful. And then I guess, you talked a little bit about the restructuring activities have been kind of centered around Europe. I was wondering – I hope there is going to be an eventual upturn in markets of China and Brazil. I guess, how are you prepared for, have you taken any restructuring activities in those markets and then how are you prepared if the market moves quickly on you to the upside? How do you respond to that? Kevin Nowlan - Chief Financial Officer & Senior Vice President: This is Kevin, I'll take that. I mean with Brazil, I think we got out ahead of it, to be honest. We took some restructuring actions, you'll recall, back in August 2014, so at the tail end of last fiscal year, when we saw this, the headwinds really starting to mount in Brazil. And you can imagine as we look forward, we'll continue to monitor that market and see if there are additional actions that we need to take in light of where the market currently is. So, we'll keep an eye on that and keep looking at that as we go forward. And then, as you can imagine, as we did in Europe, we look at other markets as well just to see if there are other areas where we should be focused to improve our cost structure. So, always something that we're looking at as we go through these difficult international markets.

But you could prepare for an upturn pretty quickly. There has no -- been major structural changes in those markets that you can prepare for a recovery that's -quickly? Jeffrey A. Craig - President & Chief Operating Officer: We feel confident we can respond to a recovery. We're in constant communication with our customers in all markets and informing them of our restructuring actions and what our ability is to provide them axles and brakes as the markets recover.

And then I just want to clarify one thing. You talk a lot about the Western European market. You don't have any exposure to Eastern Europe or Russia? Jeffrey A. Craig - President & Chief Operating Officer: Very limited other than through our primary customer, Volvo. They have some exposure in Eastern Europe. Kevin Nowlan - Chief Financial Officer & Senior Vice President: Yeah, and on the Aftermarket side, I think we talked that in prior quarters. It's less than $20 million of revenue that goes into Russia, in the $10 million, $20 million range.

That's helpful. Thank you very much. I appreciate the time.

Thank you. And our next question comes from Patrick Archambault of Goldman Sachs. Please proceed. Patrick K. Archambault - Goldman Sachs & Co.: Yeah. Hi, good morning. And yeah, congratulations, Jay, as well. Very much looking forward to working with you in your new role. And Ike, we've definitely appreciated the leadership and the transition that we've seen in this company under your direction as well. So, congratulations to you both. Just in terms of my questions, wanted to just follow up on the PACCAR item. I know that was something that was potentially impactful near-term. Have you been seeing the kind of take rate in PACCAR orders on the back of the change of standing in the quoting book? I guess that would be my first question. And then a second one would be just on Europe. I think there had been some discussion that within Europe, even though the outlook for the market is still relatively flat, some of the northern companies, kind of like Volvo and Scania have been doing a little bit better than some of the other guys, and just wanted to get your sense of if that's something you're seeing on the ground there as well. Jeffrey A. Craig - President & Chief Operating Officer: Sure. Well starting with PACCAR, we're very pleased, I would say overall we're seeing our penetrations increase at the pace that both us and PACCAR expected them to, and we see our relationship broadening every day, particularly with their operating units of Kenworth and Peterbilt. So. just on track, is what I would say. And I believe that's a view held by both sides, that we are very much on track. In terms of Northern Europe, certainly has been the story since the economic downturn, is that has tended to be stronger. But again, our primary customers are Volvo/Renault, and they've had a bit of a mixed market experience because of their Renault exposure, and Iveco, which tends to be more Southern Europe exposed. But, I would say overall on our European business, we are very pleased with its performance. And back to an earlier question, we have taken the restructuring actions that, where we're very pleased with the profitability of that business and are prepared to operate it at these volume levels if necessary for longer and be pleased with the performance. Patrick K. Archambault - Goldman Sachs & Co.: Okay. Terrific. That's all I had for you guys. Thanks a lot.

Thank you. I'd now like to turn the call over to Carl Anderson for closing remarks. Carl D. Anderson - Treasurer, VP & Head-Investor Relations: Thank you, Alison, and thank you, everybody for joining the call today. This does conclude Meritor's second quarter 2015 earnings call. Thank you.